Opening this week’s International Union of Marine Insurance (IUMI) annual conference in Edinburgh, Scotland, president Frédéric Denèfle discussed the current “turbulent seas” affecting the shipping industry, telling delegates how insurers were actively working with the government in Ukraine to restart grain shipments coverage out of the war torn nation.
A consequence of inflation, caused by covid and the war in Ukraine was already manifesting itself in the increased cost of claims, the requirement to take on more risk as asset values increase, and a related need for more capacity in the market, Denèfle said.
“As the world’s oldest insurance business, our sector has demonstrated its ability to flex to new needs and conditions, both market and macro-economic. I foresee a return to dedicated, experienced teams; a heightened reliance on intelligence and data systems to anticipate the consequences of geopolitical uncertainty; the emergence of local teams underwriting local business in their own areas to challenge fragmentation; an adjustment of market capacities and pricing to fight inflation pressures; and the creation of specialist teams to fully understand the implications of new technologies,” Denèfle said.
IUMI also presented its analysis of the latest marine insurance market trends. All lines of business reported an uplift in their global premium base for 2022 with the total reaching $35.8bn, representing an 8.3% increase on the previous year.
By line of business, the largest share was commanded by transport/cargo at 57.3% followed by global hull 23.4%, offshore energy 11.5% and marine liability (other than P&I covered by IG clubs) 7.7%.
Astrid Seltmann, vice-chair of IUMI’s facts and figures committee, provided some context, telling delegates: “Marine underwriters have suffered poor returns over several years but from 2020 results started to improve. 2021 and particularly 2022 have shown a relatively strong growth in the global premium base across all lines of business. In combination with a benign claims impact, this has translated into a much better performance in terms of loss ratios, specifically for hull and cargo.”